Where are the Bitcoin and Crypto Markets Heading?

A lot of talk and speculation about the future of Bitcoin and all crypto coins these days. While the price of Bitcoin is much higher than it was say two years ago, it’s also more than 50% off it’s peak price, and the market for things like Bitcoin futures seems to have cooled a bit. Regulator pressures exist in all directions, without any real consensus building for the future.

What makes Bitcoin so great (anonymous, cross border, world wide transactions in a flash) is exactly what makes it the bane of regulators. Bitcoin has no safety mechanisms, no “take back”, no “charge backs” and little or no way to really track down transactions. Some studies suggest than nearly 25% of all Bitcoins are lost or forgotten and will never enter into the system again. In financial terms, this is “money in a can randomly buried in the desert when you are drunk” level stuff. The entire system is set up in a way that makes in untraceable, which in turn makes it hard if not impossible to regulate.

Quite simply, governments are for the most part frowning on the process, and many are actively trying to regulate or shut down the whole deal.

IN many ways, crypto as a whole has painted itself into a corner. The cost of “mining”, which actually does the work to get transactions handled is incredibly high. For transactions less than about $100, bitcoin is effectively way too expensive to use. Merchants are dropping out, and the usefulness of the coins is diminishing. Other coins like Litecoin or whatever are trying to drop into the space, but the general lack of trust with these things is really slowing things down. The regulatory questions remain, and they are a huge hurdle that nobody seems able to jump.

So the price for Bitcoin today is about $9200. Due to increased difficulty and a bigger percentage of income being eaten by fees, my 2TH/s of Hashflare mining is still solidly underwater, current income is $0.56 a day, or $204 for the year – against a $290 initial investment. As difficulty will continue to rise, it is very likely that this picture will get worse. My guess right now is that Bitcoin will have to get and stay well over $11,000 for me to have a hope of breaking even on this by December.

So where is the market going? Who the hell knows? That level of uncertainty mean that it’s very unlikely the bulls will be able to play for long, so I am still (sadly) looking towards a $4000 or so Bitcoin price by the end of this year. So sad!